European stocks propelled to eight-month highs by renewed vaccine hopes

European shares jumped to an eight month high on Monday after drugmakers Pfizer and BioNTech flagged strong progress in their COVID-19 vaccine, while Joe Biden’s presidential victory raised hopes of a more stable U.S. trade policy.

Pfizer Inc and BioNTech SE said the experimental vaccine was more than 90% effective in preventing COVID-19 based on initial data from a large study.

The pan-European STOXX 600 surged more than 4% and was set for its best day in about six months. Travel and leisure stocks, which have been the hardest hit by the pandemic, were among the best performing sectors, adding more than 10% to hit an eight-month high.

BioNTech’s shares jumped more than 27%, while Germany’s main stock index added about 6.5%. The index was also boosted by positive trade data for September.

“The news on Pfizer’s vaccine has brought down the uncertainty on the vaccine front and has helped markets regain their lost confidence which is even more important now with a second virus wave spreading across Europe,” said Andrea Cicione, head of strategy at TS Lombard in London.

A resurgence in virus cases had hit markets hard last month, with the STOXX 600 losing more than 5% after the UK, Ireland and France all announced new nation-wide lockdowns.

But optimism over a win on Saturday by Democratic candidate Joe Biden in the U.S. election saw European stocks swiftly bouncing back, with the STOXX 600 trading about 11% higher in November so far.

“With Biden in the White House, relations with key trade partners are likely to improve,” said Milan Cutkovic, a market analyst with Axi.

“Stimulus talks are also likely to resume soon in the United States, and the European Central Bank could announce new measures as early as December.”

Investor attention has also been on Brexit trade talks, with Britain saying it was open to a “sensible” compromise on fishing and that there was goodwill on both sides to progress towards a trade deal.

The export-heavy FTSE 100 jumped 4.8%, while the British mid-cap index added 4.9%.

In company news, German chipmaker Infineon gained 2.5% as it forecast a nearly 23% jump in revenue in the year ahead.

British homebuilder Taylor Wimpey surged nearly 18%after saying it was set to deliver annual results towards the upper end of expectations as the housing market recovered quicker than expected from a coronavirus-led slump.

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